GDP Comes in Under Analysts Expectations

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... the the ... good morning ... welcome to the New Saab I'm Ralf Winkler off the top of the show said economic data is coming in shortly ... we have GDP inundated joining us to discuss that as soon as the number comes in we have Brendan Conway ... from Barron's I'm being told it said two point five percent of my year in which the brendan ... that's not as good as economists expected ... that's right well you know folks out there only three percent growth ... they're looking for a rebound from a pretty weak fourth-quarter when I think the number was his early point four percent ... yet so you know ... this this this is not one those numbers is going to get people on the market thinking ok ... were back on track ... their numbers and the use of so-called one-time factors ... in the fourth quarter ... we are expecting a snapback ... this doesn't look like ... okay I also wanna bring in Gospel shape of the senior macroeconomists from PNC financial costs good morning ... good ... morning ... ok what is your first impression of this data ... well that's disappointing we're expecting a number below of all three percent excuse me sir indicates that perhaps the economy is growing by as quickly as we thought ... I'm that's bad news for the labor market is well ... ok ... one thing I know people the been ... looking at the last quarter zero point four percent very disappointing that some people said ... it's not as Bad as It Looks pecans Shiite inventories were joined down significantly ... aam ... kasi to a concert police and people were thinking that this quarter it was to be up a lot more but maybe that was due to restocking ... aam to we have a sense that we yet we gotta look inside the data on what whether or not that was an impact here ... we just checked the numbers I really like it ... will bring an offering branded ... on the in what what what to explain for us ... that ... that quarter over quarter shifting in and how that's relevant ... two former Porsche in the Middle East in particular why that's why that's meaningful ... get what you know when I mean what you really wanna see is your see the consumer out there you know buying alot USC businesses producing a lot ... of young in terms of drawdowns of of of of of of what is you know come on the shelf ... what was cut in the warehouse ... aam I mean ... what what what what folks really wanna see is just ... a snap back of robust activity like we've seen in our the recovery's and just don't think you're seeing ... this time on the venture with the features are doing this morning but I can imagine it's a particularly ... good reaction this number ok and they just is a preview for folks ... European economics ahead of the state were already down across the board ... hearing of the markets there were down ... you know what a focus of the air on the onthe a German newspapers article about more discord between the German central bank ... on and ... on futures for the larger European Central Bank of how the bailouts over there were health of course the bigger picture nears it has been a pretty good week in Europe apparently on ... the media the biggest one week gains for stock markets there in about five months of the woods is not too surprising to see people taking it off the edge of fraud ... ok ok Gosselin come back to you ... I any other impressions is looking to the data ... well I mean inventories added about a percentage point to growth which means that underlying growth is only about one and a half percent excluding inventory sets of very weak number ... indicates that the man who really is an increase in very quickly in in in in its disappointing frankly ... I'm in awe so we'd like to see not ... just ... the broken final sales domestic product rose to two to nap percent ... that is for a nap percent indicates that consumers and businesses really more buying much of the first quarter ... just tell us how to set up ... the rest of the year for you what what's your forecast ... well you know we were expecting a decent first-quarter and slower growth in the second and third quarters ... up because of the impact of the tax increases that we've had because of the impact of the sequester us so that means that in two thousand thirteen if we see that slowing or expecting the middle of the year two thousand thirteen is gonna look pretty soft you know we were around two to nap percent ... for the entire year maybe were talking of closer to two or maybe a little bit below ... its entry into doesn't send the euro ... it very well for for considering that drives are going to happen in the middle of the year ... ok guys have been known to bring you back in ... let's talk a little bit about some you mentioned that in some stuff you've written for Barron's about the great rotation that are happening between sectors of the stock market ... talk about that a little bit and and how ... it's related seen ... really what we're seeing in the economy in terms of growth figures sure sure so ... what what you see in this year's been really remarkable ... the of the so-called hymn ... stayed sectors of bought consumer staples utilities healthcare you know the ... sex sectors that pay rich dividends in being maybe ... dont have stunning growth prospects ... those and then once in a vacuum and leaving the market this year to think about it I mean I mean that's that's not how you you would think the market would behave during sharing time in a classic expansion he think people would want to buy energy you will would with them ... while won one of the one we buy more cyclical ... parts of the market ... on this week you saw that shift a little bit which I thought was interesting ... on some bad sectors like energy synthetic sectors like materials were actually ahead by a couple of percentage points ... on in the leaders had become the lacquered so ... you see that picked up you know that might be a sign that the market is is looking ... to the next quarter for a better number but certainly today's number ... does it doesn't stay with us or Dan wiener what does this say about about inventories adding a lot to the Number ... gods of last word to you ... well we saw ... a contraction in government spending ... in the first quarter that was unexpectedly Evan Bayh a tight cut in the fourth quarter another big trend in the first quarter of the not quite as large ... as it looks like the fiscal drag or is it is a significant way on the economy this year ... ok ... just push a thank you very much senior macroeconomists from PNC Financial thanks for joining